1
Exhibit 10.34
================================================================================
CONSTRUCTION MANAGEMENT AGREEMENT
(PHASE III - IMPROVEMENTS)
BETWEEN
BNP LEASING CORPORATION
("BNPLC")
AND
NETWORK APPLIANCE, INC.
("NAI")
JUNE 16, 1999
(SUNNYVALE, CALIFORNIA)
================================================================================
2
TABLE OF CONTENTS
Page
RECITALS 1
CONSENT AND AUTHORIZATION 1
GENERAL TERMS AND CONDITIONS 1
1. CONSTRUCTION BY NAI 1
(A) The Construction Project 1
(1) Construction Approvals by BNPLC 1
(a) Preconstruction Approvals by BNPLC 1
(b) Definition of Scope Change 2
(c) Approval of Scope Changes 2
(2) NAI's Right to Control and Responsibility for Construction 2
(a) Performance of the Work 2
(b) Third Party Contracts 3
(c) Third Party Estoppels 4
(d) Adequacy of Drawings, Specifications and Budgets 4
(e) Existing Condition of the Land and Improvements 4
(f) Correction of Defective Work 4
(g) Clean Up. 4
(h) No Damage for Delays 5
(i) No Fee For Construction Management 5
(3) Quality of Work 5
(B) Completion Notice 5
2. CONSTRUCTION ADVANCES 5
(A) Costs Subject to Reimbursement Through Construction Advances 5
(B) Exclusions From Reimbursable Construction-Period Costs 6
(C) Conditions to NAI's Right to Receive Construction Advances 7
(1) Construction Advance Requests 7
(2) Amount of the Advances 7
(a) Limit Dependent Upon the Maximum Construction Allowance 7
(b) Limit Dependent Upon Costs Previously Incurred by NAI 7
(c) Limit During CMA Suspension Period 8
(d) Restrictions Imposed for Administrative Convenience 9
(3) No Advances After Certain Dates 9
(D) Breakage Costs for Construction Advances Requested But Not Taken 9
(E) No Third Party Beneficiaries 9
(F) No Waiver 9
(G) Funding by Participants 9
3. NORMAL TENANT IMPROVEMENTS 11
(A) Definition of Normal Tenant Improvements 11
(B) Advances for Normal Tenant Improvements 11
3
2
Page
(C) Tenant's Obligation to Construct Normal Tenant Improvements 11
4. COST OVERRUNS 11
(A) Definition of Projected Cost Overruns 11
(B) Notice of Projected Cost Overruns 11
(C) Election to Make a Voluntary NAI Construction Contribution 12
5. SUSPENSION AND TERMINATION 12
(A) CMA Suspension Events 12
(1) Projection of Cost Overruns 12
(2) Interruption of Construction 12
(3) Failure of NAI to Correct Defective Work 13
(4) Failure of NAI to Provide Evidence of Costs and Expenses 13
(B) FOCB Notices, Preemptive Notices and CMA Termination Events 13
(C) Rights and Obligations of NAI During a CMA Suspension Period 14
(D) Election by NAI to Terminate 14
(E) BNPLC's Right to Terminate 14
(F) Rights and Obligations Surviving Termination 14
(G) Cooperation by NAI Following any Termination 15
EXHIBITS
Exhibit A Legal Description
Exhibit B Description of the Construction Project
(With Site Plan Attached)
Exhibit C Form of Contractor Estoppel
Exhibit D Form of Design Professional Estoppel
Exhibit E Notice Requesting Advance to Cover Insurance
Deductible
Exhibit F Construction Advance Request Form
Exhibit G Notice of Voluntary NAI Funding Commitment
Exhibit H Preemptive Notice by NAI
Exhibit I Notice of Termination by NAI
(2)
4
3
CONSTRUCTION MANAGEMENT AGREEMENT
(PHASE III - IMPROVEMENTS)
This CONSTRUCTION MANAGEMENT AGREEMENT (Phase III - IMPROVEMENTS) (this
"AGREEMENT"), by and between BNP LEASING CORPORATION, a Delaware corporation
("BNPLC"), and NETWORK APPLIANCE, INC., a California corporation ("NAI"), is
made and dated as of June 16, 1999, the Effective Date. ("EFFECTIVE DATE" and
other capitalized terms used and not otherwise defined in this Agreement are
intended to have the meanings assigned to them in the Common Definitions and
Provisions Agreement (Phase III - Improvements) executed by BNPLC and NAI
contemporaneously with this Agreement. By this reference, the Common Definitions
and Provisions Agreement (Phase III - Improvements) is incorporated into and
made a part of this Agreement for all purposes.)
RECITALS
Pursuant to the Lease Agreement (Phase III - Improvements) executed by
BNPLC and NAI contemporaneously the this Agreement (the "IMPROVEMENTS LEASE"),
which covers the Improvements on the Land described in Exhibit A, BNPLC is
leasing the Improvements and any appurtenances thereto to NAI.
In anticipation of the construction of new or additional Improvements for
NAI's use pursuant to the Improvements Lease, BNPLC and NAI have agreed upon the
terms and conditions upon which BNPLC is willing to authorize NAI to arrange and
manage such construction and upon which BNPLC is willing to provide funds for
such construction, and by this Agreement BNPLC and NAI desire to evidence such
agreement.
CONSENT AND AUTHORIZATION
Subject to the terms and conditions set forth in this Agreement and in the
Improvements Lease, BNPLC does hereby grant its consent and authorization to NAI
for the construction by NAI of the Construction Project on the Land and for the
management by NAI of such construction; provided, however, all rights of NAI
against BNPLC hereunder are expressly made subject and subordinate to the
Permitted Encumbrances and to any other claims or encumbrances affecting the
Land or the Property that may be asserted by third parties and that do not
constitute Liens Removable by BNPLC.
GENERAL TERMS AND CONDITIONS
(3)
5
2
1 CONSTRUCTION BY NAI.
(A) The Construction Project.
(1) Construction Approvals by BNPLC.
(a) Preconstruction Approvals by BNPLC. NAI submitted and obtained
BNPLC's approval of the site plan and descriptions of the Construction
Project referenced in Exhibit B. Also set forth in Exhibit B is a
general description of the Construction Project. The Construction
Project, as constructed by NAI pursuant to this Agreement, and all
construction contracts and other agreements executed or adopted by NAI
in connection therewith, shall be not materially inconsistent with the
plans or other items referenced in Exhibit B, except to the extent
otherwise provided by any Scope Change (as defined below) approved by
BNPLC and except as otherwise provided in subparagraph 6(d) of the
Improvements Lease if BNPLC should make a Landlord's Election to
Continue Construction after any termination of this Agreement.
(b) Definition of Scope Change. As used herein, "SCOPE CHANGE" means a
change to the Construction Project that, if implemented, will make the
quality, function or capacity of the Improvements "materially
different" (as defined below in this subparagraph) than as described
or inferred by site plan, plans and renderings referenced in Exhibit
B. The term "SCOPE CHANGE" is not intended to include the mere
refinement, correction or detailing of the site plan, plans or
renderings submitted to BNPLC by NAI. As used in this subparagraph, a
"material difference" means a difference that could reasonably be
expected to (a) after completion of the Construction Project and the
funding of all Construction Advances required in connection therewith,
significantly reduce any excess of the market value of the Property
over Stipulated Loss Value or significantly increase any excess of
Stipulated Loss Value over the market value of the Property, (b)
change the general character of the Improvements from that needed to
accommodate the uses permitted by subparagraph 2(a) of the
Improvements Lease, or (c) result in Projected Cost Overruns (as
defined below).
(c) Approval of Scope Changes. Before making a Scope Change, NAI shall
provide to BNPLC a reasonably detailed written description of the
Scope Change, a revised construction budget for the Construction
Project and a copy of any changes to the drawings, plans and
specifications for the Improvements required in connection therewith,
all of which must be approved in writing by BNPLC (or by any
inspecting architect appointed by BNPLC from time to time) before the
Scope Change is implemented. BNPLC's approval shall not in any event
constitute a waiver of subparagraph 1(A)(3) or of any other provision
of this Agreement or the Improvements Lease.
(2) NAI's Right to Control and Responsibility for Construction. Subject to
the terms and conditions set forth in this Agreement and in the
Improvements Lease, and prior to any termination of this Agreement as
provided in subparagraphs 5(D) and 5(E), NAI shall have the sole right to
control and the sole responsibility for the design and construction of the
Construction Project, including the means, methods, sequences and
procedures implemented to accomplish such design and construction. Although
title to all Improvements will pass directly to BNPLC (as more particularly
provided in Paragraph 7 of the Improvements Lease), BNPLC's obligation with
respect to the Construction Project shall be limited to the making of
advances under and subject to the conditions set forth in this Agreement
and in Paragraph 6 of the Improvements Lease. Without limiting the
foregoing, NAI acknowledges and agrees that:
(a) Performance of the Work. Except as provided in subparagraphs 5(C)
and 5(F) NAI must, using its best skill and judgment and in an
expeditious and economical manner not inconsistent with the interests
of BNPLC, perform or cause to be performed all work required, and will
provide or cause to be provided all supplies and materials
2
6
3
required, to design and complete construction of the Construction
Project (collectively "WORK"). The Work will include obtaining all
necessary building permits and other governmental approvals required
in connection with the design and construction of the Construction
Project, including the design and construction of Normal Tenant
Improvements (as defined below), or required in connection with the
use and occupancy thereof (e.g., final certificates of occupancy). The
Work will also include any repairs or restoration required because of
damage to Improvements by fire or other casualty prior to the Base
Rent Commencement Date (a "PRE-COMMENCEMENT CASUALTY"); however, the
cost of any such repairs or restoration will be subject to
reimbursement not only through Construction Advances made on and
subject to the terms and conditions of this Agreement, but also
through the application of Escrowed Proceeds as provided in the
Improvements Lease. NAI will carefully schedule and supervise all
Work, will check all materials and services used in connection with
all Work and will keep full and detailed accounts as may be necessary
to document expenditures made or expenses incurred for the Work.
Subject to delays beyond the reasonable control of NAI, NAI shall
cause all Work to be completed on or before the first Business Day of
October, 2000.
(b) Third Party Contracts.
1) NAI shall not enter into any construction contract or other
agreement with a third party concerning the Work or the
Construction Project (a "THIRD PARTY CONTRACT") in the name of
BNPLC or otherwise purport to bind BNPLC to any obligation to any
third party.
2) In any Third Party Contract between NAI and any of its
Affiliates (an "AFFILIATE'S CONTRACT") NAI shall reserve the
right to terminate the contract at any time, without cause, and
without subjecting NAI to liability for any Termination Fee (as
defined below). Further, NAI shall not enter into any Affiliate's
Contract that obligates NAI to pay more than would be required
under an arms-length contract or that would require NAI to pay
its Affiliate any amount in excess of the sum of actual,
out-of-pocket direct costs and internal labor costs incurred by
the Affiliate to perform such contract.
3) As necessary to limit the total Reimbursable Third Party
Contract Termination Fees (as defined below) for which BNPLC may
be required to provide Construction Advances to no more than
$4,000,000 (the "MAXIMUM PERMITTED TERMINATION FEES"), NAI shall
reserve in every significant Third Party Contract an absolute
express right to terminate such contract at any time, without
cause. Although any Third Party Contract (other than an
Affiliate's Contract) may require NAI to pay a specified
Termination Fee in the event of such a termination, the specified
Termination Fee must not exceed the difference computed by
subtracting (I) the aggregate of all Termination Fees that have
been paid or would become payable by NAI if NAI terminated all
other Third Party Contracts, from (II) the Maximum Permitted
Termination Fees. Without limiting the foregoing, NAI will manage
and administer all Third Party Contracts as necessary to ensure
that, at any point in time, NAI can terminate all such contracts
without becoming liable for Termination Fees in excess of the
Maximum Permitted Termination Fees.
4) As used in this Agreement, "TERMINATION FEE" means any amount,
however denominated, for which NAI will be obligated under a
Third Party Contract as a result of any election or decision by
NAI to terminate such Third Party Contract, including
demobilization costs; provided, however, amounts payable for
Prior Work [as defined below] as of the date any such termination
are not intended to be characterized as Termination Fees for
purposes of this Agreement. If, as described in the preceding
paragraph, NAI reserves an absolute express right in a Third
Party Contract to terminate such contract at any time, without
cause, for a specified dollar amount, such dollar amount will
constitute a Termination Fee. If no such right is reserved
in a Third Party Contract, the Termination Fee applicable
3
7
4
to such contract for purposes of this Agreement will be the
amount of damages that NAI could be required to pay (in addition
to payments required for Prior Work) upon an anticipatory
repudiation of the Third Party Contract by NAI.
(c) Third Party Estoppels. If requested by BNPLC with respect to any
material general construction contract between NAI and a third party
contractor for any part of the Work, NAI shall cause the contractor to
execute and deliver to BNPLC an estoppel letter substantially in the
form of Exhibit C. Similarly, if requested by BNPLC with respect to
any material architectural or engineering contract between NAI and a
third party professional or firm for any part of the Work, NAI shall
cause the professional or firm thereunder to execute and deliver to
BNPLC an estoppel letter substantially in the form of Exhibit D.
(d) Adequacy of Drawings, Specifications and Budgets. BNPLC has made
and will make no representations as to the adequacy of any budgets,
site plans, renderings, plans, drawings or specifications for the
Construction Project, and no modification of any such budgets, site
plans, renderings, plans, drawings or specifications that may be
required from time to time will entitle NAI to any adjustment in the
Construction Allowance.
(e) Existing Condition of the Land and Improvements. NAI is familiar
with the conditions of the Land and any existing Improvements on the
Land. NAI shall have no claim for damages against BNPLC or for an
increase in the Construction Allowance by reason of any condition
(concealed or otherwise) of or affecting the Land or Improvements.
(f) Correction of Defective Work. NAI will promptly correct all Work
performed prior to any termination of this Agreement that does not
comply with the requirements of this Agreement or that is otherwise
defective (in either case, "DEFECTIVE WORK") at NAI's sole expense. If
NAI fails to correct any Defective Work or fails to carry out Work in
accordance with this Agreement, BNPLC may (but will not be required
to) order NAI to stop all Work until the cause for such failure has
been eliminated.
(g) Clean Up. Upon the completion of all Work, NAI will remove all
waste material and rubbish from and about the Land, as well as all
tools, construction equipment, machinery and surplus materials. NAI
will keep the Land and the Improvements thereon in a reasonably safe
and sightly condition as Work progresses.
(h) No Damage for Delays. NAI shall have no claim for damages against
BNPLC or for an increase in the Construction Allowance by reason of
any delay in the performance of any Work.
(i) No Fee For Construction Management. NAI shall have no claim for
any fee or other compensation or for any reimbursement of internal
administrative or overhead expenses of NAI under this Agreement, it
being understood that NAI is executing this Agreement in consideration
of the rights expressly granted to it herein and in the Improvements
Lease.
(3) Quality of Work. NAI shall cause the Work undertaken and administered
by it pursuant to this Agreement to be performed (a) in a safe and good and
workmanlike manner, (b) in accordance with Applicable Laws, (c) in
compliance with (i) the provisions of this Agreement and the Improvements
Lease, (ii) the material provisions of the Permitted Encumbrances and (iii)
the material provisions of the Development Documents, and (d) in a manner
that, taken as a whole, enhances the value of the Property commensurate
with any Construction Advances and Carrying Costs added to the Outstanding
Construction Allowance in connection therewith.
(B) Completion Notice. NAI shall provide a notice (a "COMPLETION NOTICE") to
BNPLC promptly after construction of the Construction Project is substantially
complete, advising BNPLC of the substantial completion.
4
8
2 CONSTRUCTION ADVANCES.
(A) Costs Subject to Reimbursement Through Construction Advances. Subject to
the terms and conditions set forth herein, NAI shall be entitled to a
Construction Allowance, from which BNPLC will make Construction Advances on
Advance Dates from time to time to pay or reimburse NAI for the following costs
("REIMBURSABLE CONSTRUCTION-PERIOD COSTS") to the extent the following costs are
not already included in Transaction Expenses paid by BNPLC from the Initial
Funding Advance:
(1) the actual costs and expenses incurred or paid by NAI for the
preparation, negotiation and execution of this Agreement and the other
Operative Documents;
(2) the cost of title insurance or other out of pocket expenses described
in subparagraph 5(c)(iii) of the Improvements Lease or of the Other Lease
Agreement to the extent paid by NAI prior to the Base Rent Commencement
Date;
(3) Commitment Fees;
(4) costs of the Work, including not only hard costs incurred for the new
Improvements described in Exhibit B, but also the following costs to the
extent reasonably incurred in connection with the Construction Project:
o soft costs, such as architectural fees, engineering
fees and fees and costs paid in connection with
obtaining project permits and approvals required by
governmental authorities or the Development Documents,
o site preparation costs, and
o costs of offsite and other public improvements required
as conditions of governmental approvals for the
Construction Project;
(5) the cost of maintaining insurance required by (and consistent with the
requirements of) the Improvements Lease and the Other Lease Agreement prior
to the Base Rent Commencement Date, and costs of repairing any damage to
the Improvements caused by a Pre-commencement Casualty to the extent such
costs are not covered by Escrowed Proceeds made available to NAI as
provided in the Improvements Lease and the Other Lease Agreement prior to
the Base Rent Commencement Date ("REIMBURSABLE RESTORATION COSTS");
(6) Impositions that accrue or become due under the Improvements Lease or
the Other Lease Agreement prior to the Base Rent Commencement Date; and
(7) except as otherwise provided in subparagraph 2(B) below, Termination
Fees payable by NAI in connection with any Third Party Contract between NAI
and a Person not an Affiliate of NAI because of any election by NAI to
cancel or terminate such contract during a CMA Suspension Period (as
defined below).
In addition to other Construction Advances required by this subparagraph 2(A),
but subject to the other terms and conditions hereof, a Construction Advance
will be provided by BNPLC on the Base Rent Commencement Date in the form of
additional Escrowed Proceeds (to be held and applied like other Escrowed
Proceeds pursuant to the Improvements Lease) equal to any reduction in property
insurance proceeds paid or payable with respect to the Property because of a
property insurance deductible permitted by Exhibit B attached to the
Improvements Lease, if:
5
9
6
(I) damage to the Improvements has been caused by a Pre-commencement
Casualty and, despite the exercise of reasonable diligence by NAI, NAI has
been unable to complete the repair of such damage sufficiently in advance
of the Base Rent Commencement Date to allow the reimbursement to NAI
hereunder of all Reimbursable Restoration Costs attributable to such
property insurance deductible; and
(II) at least five Business Days before the Base Rent Commencement
Date, NAI has requested such additional Construction Advance by a notice in
the form attached hereto as Exhibit E.
(B) Exclusions From Reimbursable Construction-Period Costs. Notwithstanding
anything herein to the contrary, BNPLC shall not be required to make any
Construction Advance to pay or to reimburse or compensate NAI for any of the
following or any Absolute NAI Construction Obligations required because of or in
connection with or arising out of any of the following:
(1) Environmental Losses;
(2) Losses that would not have been incurred but for any act or omission of
NAI or of any NAI's contractors or subcontractors, which act or omission is
contrary in any material respect to the other terms and conditions of this
Agreement or to the terms and conditions of the other Operative Documents,
during the period that this Agreement remains in force or during any other
period that NAI remains in possession or control of the Construction
Project pursuant to the Improvements Lease or otherwise;
(3) Losses that would not have been incurred but for any fraud,
misapplication of Construction Advances or other funds, illegal acts, or
willful misconduct on the part of the NAI or its employees or agents or any
other party for whom NAI is responsible;
(4) Losses that would not have been incurred but for any bankruptcy
proceeding involving NAI; and
(5) costs of Normal Tenant Improvements (as defined below), except to the
extent that BNPLC agrees to allow the reimbursement of such costs from the
Construction Allowance as provided in subparagraph 3(B).
For purposes of this subparagraph, "acts and omissions" described in clause (2)
preceding shall include (i) any decision by NAI to make any Scope Change without
the prior approval of BNPLC, (ii) any failure of NAI to maintain insurance
required by the Improvements Lease, the Other Lease Agreement or this Agreement,
(iii) any decision of NAI not to continue or complete Work because of a change
in NAI's facility needs or in NAI's plans to meet its facility needs (such as,
for example, a decision by NAI to lease or acquire another less expensive
facility as an alternative to the Improvements), (iv) any failure by NAI to
reserve termination rights in Third Party Contracts as required by subparagraph
1(A)(2)(b), and (v) any other material breach by NAI of this Agreement.
(C) Conditions to NAI's Right to Receive Construction Advances. BNPLC's
obligation to provide Construction Advances to NAI from time to time under this
Agreement shall be subject to the following terms and conditions, all of which
terms and conditions are intended for the sole benefit of BNPLC, and none of
which terms and conditions shall limit in any way the right of BNPLC to treat
costs or expenditures incurred or paid by or on behalf of it as Construction
Advances pursuant to subparagraph 6(d) of the Improvements Lease:
(1) Construction Advance Requests. NAI must make a written request (a
"CONSTRUCTION ADVANCE REQUEST") for any Construction Advance, specifying
the amount of such advance, at least five Business Days prior to the
Advance Date upon which the advance is to be paid. To be effective for
purposes of this Agreement, a Construction Advance Request
6
10
7
must be in substantially the form attached as Exhibit F. NAI shall not
submit more than one Construction Advance Request in any calendar month.
(2) Amount of the Advances.
(a) Limit Dependent Upon the Maximum Construction Allowance. NAI
shall not be entitled to require any Construction Advance that would
cause the Funded Construction Allowance to exceed the Maximum
Construction Allowance.
(b) Limit Dependent Upon Costs Previously Incurred by NAI. NAI shall
not be entitled to require any Construction Advance - other than a
final additional Construction Advance required on the Base Rent
Commencement Date because of a permitted property insurance deductible
related to a Pre-commencement Casualty as described in subparagraph
2(A) above - that would cause the aggregate of all Construction
Advances to exceed the sum of:
(i) Reimbursable Construction-Period Costs that NAI has, to the
reasonable satisfaction of BNPLC, substantiated as having been
paid or incurred by NAI other than for Work (e.g., Impositions),
plus
(ii) the Reimbursable Construction-Period Costs that NAI has, to
the reasonable satisfaction of BNPLC, substantiated as having
been paid or incurred for Prior Work as of the date of the
Construction Advance Request requesting the advance.
As used in this Agreement, "PRIOR WORK" means all labor and services
actually performed, and all materials actually delivered to the
construction site, in accordance with this Agreement prior to the date
in question as part of the Work, and "FUTURE WORK" means labor and
services performed or to be performed, and materials delivered or to
be delivered, after the date in question as part of the Work. For
purposes of this Agreement, NAI and BNPLC intend to allocate
Reimbursable Construction-Period Costs between Prior Work and Future
Work in a manner that is generally consistent with the allocations
expressed or implied in construction-related contracts negotiated in
good faith between NAI and third parties not affiliated with NAI
(e.g., a general contractor); however, in order to verify the amount
of Reimbursable Construction-Period Costs actually paid or incurred by
NAI and the proper allocation thereof between Prior Work and Future
Work, BNPLC shall be entitled (but not required) to: (x) request,
receive and review copies of such agreements between NAI and third
parties and of draw requests, budgets or other supporting documents
provided to NAI in connection with or pursuant to such agreements as
evidence of the allocations expressed or implied therein, (y) from
time to time engage one or more independent inspecting architects,
certified public accountants or other appropriate professional
consultants and, absent manifest error, rely without further
investigation upon their reports and recommendations, and (z) without
waiving BNPLC's right to challenge or verify allocations required with
respect to future Construction Advances, rely without investigation
upon the accuracy of NAI's own Construction Advance Requests.
7
11
8
(c) Limit During CMA Suspension Period. Without limiting the other
terms and conditions imposed by this Agreement for the benefit of
BNPLC with respect all Construction Advances, BNPLC shall have no
obligation to make any Construction Advance during any CMA Suspension
Period (as defined below) that would cause the aggregate of all
Construction Advances to exceed the sum of:
(i) Reimbursable Construction-Period Costs that NAI has, to
the reasonable satisfaction of BNPLC, substantiated as having
been paid or incurred by NAI other than for Work (e.g.,
Impositions), plus
(ii) the Reimbursable Construction-Period Costs that NAI
has, to the reasonable satisfaction of BNPLC, substantiated as
having been paid or incurred for Prior Work (as defined below) as
of the date the CMA Suspension Period commenced.
For purposes of computing the limits described in this subparagraph
2(C)(2)(C), Reimbursable Construction-Period Costs "other than for
Work" shall include Termination Fees that qualify as Reimbursable
Construction-Period Costs pursuant to subparagraph 2(A)(7)
("REIMBURSABLE THIRD PARTY CONTRACT TERMINATION FEES"). NAI
acknowledges, however, that Termination Fees will not exceed the
Maximum Permitted Termination Fees, so long as NAI complies with the
requirements of subparagraph 1(A)(2)(b). That is, but for an "act or
omission of NAI" as such phrase is used in subparagraph 2(B)(2), the
aggregate of all Termination Fees shall not exceed the Maximum
Permitted Termination Fees. Accordingly, if the aggregate of any
Termination Fees do exceed the Maximum Permitted Termination Fees, the
excess shall not qualify as Reimbursable Third Party Contract
Termination Fees.
(d) Restrictions Imposed for Administrative Convenience. NAI shall
not request any Construction Advance (other than the final
Construction Advance NAI intends to request) for an amount less than
$500,000.
(3) No Advances After Certain Dates. BNPLC shall have no obligation to make
any Construction Advance (x) after the Base Rent Commencement Date, (y) on
or after the Designated Sale Date, or (z) on or after the date of any
termination of this Agreement pursuant to subparagraph 5(D) or subparagraph
5(E).
(D) Breakage Costs for Construction Advances Requested But Not Taken. If NAI
requests but thereafter declines to accept any Construction Advance, or if NAI
requests a Construction Advance that it is not permitted to take because of its
failure to satisfy any of the conditions specified in subparagraph 2(c), NAI
shall pay upon demand any resulting Breakage Costs.
(E) No Third Party Beneficiaries. No contractor or other third party shall be
entitled to require BNPLC to make advances as a third party beneficiary of this
Agreement or of the Improvements Lease or otherwise.
8
12
9
(F) No Waiver. No funding of Construction Advances and no failure of BNPLC to
object to any Work proposed or performed by or for NAI shall constitute a waiver
by BNPLC of the requirements contained in this Agreement.
(G) Funding by Participants. NAI acknowledges that, as provided in the
Participation Agreement, each Participant has agreed to pay to BNPLC a
Percentage (under and as defined in the Participation Agreement) of the
Construction Advances required by this Agreement. NAI also acknowledges that
BNPLC will not be responsible to NAI for any failure of any Participant to
provide advances required by the Participation Agreement. So long as any
Participant fails to provide its Percentage of any requested Construction
Advance, then the amount of the Construction Advance for which BNPLC shall be
obligated hereunder shall be reduced by the amount that the Participant should
have provided, but failed to provide, in accordance with the Participation
Agreement. No such reduction, however, of BNPLC's obligation hereunder shall
release or impair the obligation of the Participant directly to NAI, created by
NAI's status as a third party beneficiary of the Participant's commitment under
the Participation Agreement to provide the Participant's Percentage of
Construction Advances. Further, any such failure shall excuse BNPLC's obligation
to provide the requested Construction Advance only to the extent of the funds
that the applicable Participant or Participants should have advanced (but did
not advance) to BNPLC, and in the event of any such failure:
(1) BNPLC will immediately notify NAI, but BNPLC will not in any event be
liable to NAI for BNPLC's failure to do so.
(2) BNPLC will to the extent possible postpone reductions of Construction
Advances because of the failure by any one or more Participants
("DEFAULTING PARTICIPANTS") to make required advances under the
Participation Agreement (a "PARTICIPANT DEFAULT") by adjusting (and
readjusting from time to time, as required) the funding "Percentages" of
other Participants, and by requesting the other Participants to make
advances to BNPLC on the basis of such adjusted Percentages, in each case
as provided in the Participation Agreement; however, so long as a
Participant Default continues, no Construction Advance shall be required
that would cause the Outstanding Construction Allowance to exceed (1) the
Maximum Construction Allowance available under this Agreement, less (2) all
amounts that should have been, but because of a continuing Participant
Default have not been, advanced by any one or more of the Participants to
BNPLC under the Participation Agreement with respect to Construction
Advances.
(3) Further, after a Participant Default, and so long as no CMA Termination
Event (as defined below) has occurred and no Event of Default has occurred
and is continuing, BNPLC shall do the following as reasonably requested by
NAI, provided that nothing in this provision shall require BNPLC to take
any action that would violate Applicable Laws, that would constitute a
breach of BNPLC's obligations under the Participation Agreement, or that
would require BNPLC to waive any rights or remedies it has under this
Agreement or other Operative Documents:
(a) BNPLC shall promptly make a written demand upon the Defaulting
Participants for the cure of the Participant Default, and
(b) BNPLC shall not unreasonably withhold its approval for the substitution
of any new participant proposed by NAI for Defaulting Participants, if (A)
the proposed substitution does not require BNPLC to waive rights against
the Defaulting Participants, (B) the new participant will agree (by
executing supplement to the Participation Agreement as provided in the
Participation Agreement) to provide funds to replace the payments that
would otherwise be required of the Defaulting Participants with respect to
future Construction Advances, (C) the new participant (or NAI) provides the
funds (if any) needed to terminate the Defaulting Participants' rights to
receive payments of "Net Cash Flow" (as defined in the Participation
Agreement) that BNPLC will be required to pay the new participant under the
terms of the substitution reasonably proposed by NAI, (D) the new
participant (or NAI) provides and agrees in writing to provide funds needed
to reimburse BNPLC for any and all Losses incurred by BNPLC in connection
with or because of the substitution of the new participant for the
Defaulting Participants, including any cost of defending and paying any
claim asserted by Defaulting Participants because of the
9
13
10
substitution (but not including any liability of BNPLC to the Defaulting
Participants for damages caused by BNPLC's bad faith or gross negligence in
the performance of BNPLC's obligations to the Defaulting Participants), (E)
the obligations of BNPLC to the new participant per dollar of the new
participant's "investment" (it being understood that such investment will
be computed in a manner consistent with the examples set forth in Exhibit A
to the Participation Agreement, but net of reimbursements to BNPLC under
clause (D) preceding) shall not exceed the obligations per dollar of
investment by the Defaulting Participants that BNPLC would have had to the
Defaulting Participants if there had been no Participant Default, and (F)
the new participant shall be a reputable financial institution having a net
worth of no less than seven and one half percent (7.5%) of total assets and
total assets of no less than $10,000,000,000.00 (all according to then
recent audited financial statements).
3 NORMAL TENANT IMPROVEMENTS.
(A) Definition of Normal Tenant Improvements. As used herein, "NORMAL TENANT
IMPROVEMENTS" shall mean any "below-ceiling" interior finishes and special
fixtures or equipment to be constructed for NAI within the Improvements as part
of the Construction Project, BUT WILL NOT INCLUDE (1) costs of structural
elements of the Construction Project, or (2) equipment that would be necessary
for the use of the Improvements by any lessee (e.g., HVAC equipment, elevators,
standard electrical wiring).
(B) Advances for Normal Tenant Improvements. Nothing herein shall be construed
as a commitment or an agreement by BNPLC to pay for Normal Tenant Improvements,
other than Normal Tenant Improvements contemplated in the description of the
Construction Project set forth in Exhibit B and the attachments thereto. BNPLC
does, however, acknowledge that incorporated into the total Construction
Allowance is an amount for contingencies (e.g., cost overruns related to
structural components of Improvements, HVAC equipment, elevators, etc.), for
which BNPLC shall be obligated to provide Construction Advances on and subject
to the terms and conditions set forth in Paragraph 2. To the extent, if any,
that NAI does not exhaust the Construction Allowance by using Construction
Advances for other costs (e.g., the actual costs incurred for structural
components of Improvements, HVAC equipment, elevators, etc.), BNPLC will allow
NAI to reimburse itself through Construction Advances funded on and subject to
the terms and conditions of Paragraph 2 for the costs of any Normal Tenant
Improvements in addition to those contemplated in the description of the
Construction Project set forth in Exhibit B and the attachments thereto.
Otherwise, any such additional Normal Tenant Improvements will be paid for by
NAI.
(C) Tenant's Obligation to Construct Normal Tenant Improvements. NAI shall
construct all Normal Tenant Improvements in a good and workmanlike manner and in
accordance with the same standards and requirements imposed by this Agreement
for other Work.
4 COST OVERRUNS.
(A) Definition of Projected Cost Overruns. As used in this Agreement, "PROJECTED
COST OVERRUNS" shall mean the excess (if any), calculated as of the date of each
Construction Advance Request, of (1) the total of projected Reimbursable
Construction-Period Costs yet to be incurred or for which NAI has yet to be
reimbursed hereunder (including projected Reimbursable Construction-Period Costs
for Future Work), over (2) the sum of a) any Voluntary Construction Contribution
NAI has committed to pay as provided in subparagraph 4(c), but has yet to pay,
plus b) the balance of the remaining Construction Allowance then projected to be
available to cover such costs. The balance of the remaining Construction
Allowance then projected to be available will equal (i) the amount (if any) by
which the Maximum Construction Allowance exceeds the Funded Construction
Allowance, less (ii) the sum of (a) projected future Carrying Costs, plus (b)
any funds that should have been but were not advanced to BNPLC by any Defaulting
Participants under (and as defined in) the Participation Agreement.
10
14
11
(B) Notice of Projected Cost Overruns. If for any reason (including any damage
to the Property by fire or other casualty or any taking of any part of the
Property by condemnation) NAI believes (after taking into account any Voluntary
NAI Construction Contributions NAI has made or committed to make as provided in
subparagraph 4(C)) that Projected Cost Overruns are more likely than not at the
time NAI submits any Construction Advance Request, NAI shall state such belief
in the Construction Advance Request and, if NAI can reasonably do so, NAI will
estimate the approximate amount of such Projected Cost Overruns.
(C) Election to Make a Voluntary NAI Construction Contribution. As used in this
Agreement, "VOLUNTARY NAI CONSTRUCTION CONTRIBUTION" shall mean a voluntary,
nonrefundable payment made to BNPLC by NAI prior to the Base Rent Commencement
Date and delivered with or pursuant to a notice in the form of Exhibit G,
confirming that a Voluntary NAI Construction Contribution is being paid or will
be paid pursuant to this subparagraph. To prevent the occurrence of or to cure
any CMA Suspension Event described in subparagraph 5(A)(1), NAI shall be
entitled (but not obligated) to make or commit to make a Voluntary NAI
Construction Contribution in addition to (and, except as provided in the
definition of Issue 97-10 Prepayment in the Common Definitions and Provisions
Agreement (Phase III - Improvements), without reducing or excusing) any other
amounts then due from NAI to BNPLC pursuant to the Operative Documents. Like
other Qualified Prepayments, any Voluntary NAI Construction Contribution will
reduce the Outstanding Construction Allowance as described in the definition
thereof in the Common Definitions and Provisions Agreement (Phase III -
Improvements). In contrast, however, to other Qualified Prepayments, Voluntary
NAI Construction Contributions will be subtracted for purposes of calculating
the Funded Construction Allowance and, thus, will effectively increase the
subsequent Construction Advances available under the limit established by
subparagraph 2(C)(2)(a).
5 SUSPENSION AND TERMINATION.
(A) CMA Suspension Events. Each of the following events shall be a "CMA
SUSPENSION EVENT" under this Agreement:
(1) Projection of Cost Overruns. Either (a) BNPLC shall receive any
Construction Advance Request stating that NAI believes Projected Cost
Overruns are more likely than not, as provided in subparagraph 4(B), or (b)
(i) BNPLC shall otherwise determine in good faith that significant
Projected Cost Overruns are likely (taking into account any failure of a
Defaulting Participant to provide funds to BNPLC as required by the
Participation Agreement and any prior Voluntary NAI Construction
Contributions NAI has made or committed to make as provided in subparagraph
4(C)), (ii) BNPLC shall notify NAI of such determination and the basis
therefor, and (iii) NAI shall fail to give any notice pursuant to
subparagraph 4(C) that, by committing NAI to make or increase Voluntary NAI
Construction Contributions, effectively eliminates the likelihood of the
Projected Cost Overruns on or before five Business Days after BNPLC's
notice to NAI of such determination.
(2) Interruption of Construction. The Construction Project shall, for any
reason after Work commences (including any damage to the Property by fire
or other casualty or any taking of any part of the Property by
condemnation), no longer be substantially progressing (and shall not have
progressed in any substantial way during the preceding forty-five days), in
a good and workmanlike manner and substantially in accordance with
Applicable Laws, with Permitted Encumbrances, with Development Documents
and with the requirements of this Agreement.
(3) Failure of NAI to Correct Defective Work. NAI shall fail to diligently
pursue the correction of any Defective Work of which NAI has received
notice.
(4) Failure of NAI to Provide Evidence of Costs and Expenses. BNPLC shall
have requested, and NAI shall have failed to provide within ten Business
Days after receipt of the request, with respect to any Construction
Advance: (1) invoices, requests for payment from contractors and other
evidence reasonably establishing that the costs and expenses for which NAI
has requested or is requesting reimbursement constitute actual Reimbursable
Construction-Period Costs, and (2)
11
15
12
canceled checks, lien waivers and other evidence reasonably establishing
that all prior Construction Advances have been used by NAI to pay, and only
to pay, the Reimbursable Construction-Period Costs for which the prior
advances were requested and made.
(B) FOCB Notices, Preemptive Notices and CMA Termination Events.
(1) As used herein, "FOCB NOTICE" means a notice from BNPLC to NAI that
BNPLC is considering a termination of this Agreement pursuant to
subparagraph below, provided that the notice is given prior to BNPLC's
receipt from NAI of a Completion Notice and is given when:
(a) any Event of Default has occurred and is continuing; or
(b) any CMA Suspension Event shall have occurred, NAI shall have
received notice of such CMA Suspension Event (a "CMA SUSPENSION
NOTICE") and the CMA Suspension Event shall have continued for thirty
days after NAI's receipt of such notice; or
(c) NAI shall have failed to maintain the following insurance, or to
provide insurance certificates to BNPLC as required by the
Improvements Lease with respect to the following insurance, and such
failure shall have continued for a period of five Business Days after
any notice to NAI thereof:
1) property insurance as required by the Improvements Lease,
including builder's completed value risk insurance as BNPLC may
require to protect BNPLC's and NAI's interests in the
Improvements under construction against risks of physical loss,
such insurance to be maintained by NAI at all times until
completion of the Construction Project; and
2) commercial general liability insurance as required by the
Improvements Lease.
(2) As used herein, "PREEMPTIVE NOTICE" means a notice from NAI to BNPLC in
the form attached hereto as Exhibit , given after BNPLC has given any FOCB
Notice, but before NAI has made any Issue 97-10 Election, that is
sufficient and effective under clause (2) of the definition of Designated
Sale Date in the Common Definitions and Provisions Agreement (Phase III -
Improvements) to accelerate the Designated Sale Date to a date that is less
than ninety days after the date of BNPLC's FOCB Notice.
(3) For purposes of this Agreement and the other Operative Documents, "CMA
TERMINATION EVENT" shall mean:
(a) BNPLC's receipt of a Notice of NAI's Intent to Terminate (as
defined below); or
(b) A failure of NAI for any reason whatsoever to deliver a duly
executed, effective Preemptive Notice within thirty days after NAI's
receipt of an FOCB Notice.
(C) Rights and Obligations of NAI During a CMA Suspension Period. As used
herein, "CMA SUSPENSION PERIOD" shall mean any period (1) beginning with the
date of any CMA Suspension Notice, FOCB Notice or Notice of NAI's Intent to
Terminate, and (2) ending on the earlier of (a) the first date upon which (i) no
CMA Suspension Events shall be continuing, and (ii) no CMA Termination Events
shall have occurred, or (b) the effective date of any termination of this
Agreement as described in subparagraph 5(D) or 5(E) subparagraph. During any CMA
Suspension Period, NAI shall have the right to suspend the
12
16
13
Work; provided, however, the obligations of NAI which are to survive any
termination of this Agreement shall also continue and survive during any such
suspension of the Work.
(D) Election by NAI to Terminate. NAI may elect to terminate this Agreement at
any time prior to the Base Rent Commencement Date when NAI has determined that
(1) the Construction Advances to be provided to it hereunder will not be
sufficient to cover all Reimbursable Construction-Period Costs, whether because
the cost of the Work exceeds budgeted expectations (resulting in Projected Cost
Overruns), because of damage to the Property by fire or other casualty (other
than damage that would not have occurred, or been uninsured or under-insured,
but for an act or omission of NAI), because of a taking of any part of the
Property by condemnation, or because NAI can no longer satisfy conditions to
BNPLC's obligation to provide Construction Advances herein, or (2) the
Construction Project cannot be substantially completed before the Base Rent
Commencement Date for reasons other than a breach by NAI of this Agreement. To
be effective, however, any such election to terminate this Agreement must be
made by giving BNPLC and the Participants a notice thereof prior to the Base
Rent Commencement Date in the form of Exhibit I (a "NOTICE OF NAI'S INTENT TO
Terminate"), stating that NAI intends to terminate this Agreement pursuant to
this subparagraph on a date specified therein, which date is not less than
thirty days after the date of such notice. Unless terminated sooner pursuant to
subparagraph 5(E), this Agreement will automatically terminate on the effective
date so specified in any Notice of NAI's Intent to Terminate.
(E) BNPLC's Right to Terminate. BNPLC shall be entitled to terminate this
Agreement at any time (x) more than ninety days after BNPLC has given an FOCB
Notice as described in subparagraph (regardless of whether at the time of such
termination by BNPLC an Event of Default or other event or circumstance
described in subparagraph is continuing), provided that BNPLC shall not have
received an effective Preemptive Notice within thirty days after its delivery of
the FOCB Notice to NAI, (y) after the Designated Sale Date, or (z) after BNPLC's
receipt of a Notice of NAI's Intent to Terminate.
(F) Rights and Obligations Surviving Termination. Following any termination of
this Agreement as provided in subparagraph 5(D) or in 5(E), NAI shall have no
obligation to continue or complete any Work; provided, however, no termination
of this Agreement shall reduce or excuse the following rights and obligations of
the parties, it being intended that all such rights and obligations shall
survive and continue after any such termination:
(1) the rights and obligations of NAI and BNPLC under the other Operative
Documents, including Absolute NAI Construction Obligations imposed upon NAI
by the Improvements Lease; and
(2) NAI's obligations described in the next subparagraph 5(G).
(G) Cooperation by NAI Following any Termination. After any termination of this
Agreement as provided in subparagraph 5(D) or subparagraph 5(E), NAI shall
comply with the following terms and conditions, all of which shall survive any
such termination:
(1) NAI shall promptly deliver copies to BNPLC of all Third Party Contracts
and purchase orders made by NAI in the performance of or in connection with
the Work, together with all plans, drawings, specifications, bonds and
other materials relating to the Work in NAI's possession, including all
papers and documents relating to governmental permits, orders placed, bills
and invoices, lien releases and financial management under this Agreement.
All such deliveries shall be made free and clear of any liens, security
interests, or encumbrances, except such as may be created by the Operative
Documents.
(2) Promptly after any request from BNPLC made with respect to any Third
Party Contract, NAI shall deliver a letter confirming: (i) that NAI has not
performed any act or executed any other instrument which invalidates or
modifies such contract in whole or in part (or, if so, the nature of such
modification); (ii) the extent to which such contract is valid and
13
17
14
subsisting and in full force and effect; (iii) that there are no defaults
or events of default then existing under such contract and, to NAI's
knowledge, no event has occurred which with the passage of time or the
giving of notice, or both, would constitute such a default or event of
default (or, if there is a default, the nature of such default in detail);
(iv) that the services and construction contemplated by such contract is
proceeding in a satisfactory manner in all material respects (or if not, a
detailed description of all significant problems with the progress of the
services or construction); (v) in reasonable detail the then critical dates
projected by NAI for work and deliveries required by such contract; (vi)
the total amount received by the other party to such contract for work or
services provided by the other party through the date of the letter; (vii)
the estimated total cost of completing the services and work contemplated
under such contract as of the date of the letter, together with any current
draw or payment schedule for the contract; and (viii) any other information
BNPLC may reasonably request to allow it to decide what steps it should
take concerning the contract within BNPLC's rights under this Agreement and
the other Operative Documents.
(3) NAI will make every reasonable effort, as and to the extent requested
by BNPLC, to secure the cancellation of any then existing Third Party
Contract upon terms satisfactory to BNPLC. NAI shall bear any cancellation
fees or other Losses resulting from any cancellation of a Third Party
Contract after the effective date of a termination of this Agreement.
(4) NAI will make every reasonable effort, as and to the extent requested
by BNPLC, to secure any required consents or approvals for an assignment of
any then existing Third Party Contract to BNPLC or its designee, upon terms
satisfactory to BNPLC. To the extent assignable, any Third Party Contract
will be assigned by NAI to BNPLC upon request.
(5) If NAI has canceled any Third Party Contract before and in anticipation
of a termination of this Agreement, NAI shall make every reasonable effort,
as and to the extent requested by BNPLC, to secure a reinstatement of such
Third Party Contract in favor of BNPLC and upon terms satisfactory to
BNPLC.
(6) For a period not to exceed ten days after the termination, NAI shall
take such steps as are reasonably necessary to preserve and protect Work
completed and in progress and to protect materials, equipment, and supplies
at the Property or in transit.
14
18
15
IN WITNESS WHEREOF, NAI and BNPLC have caused this Agreement to be executed
as of June 16, 1999.
"NAI"
NETWORK APPLIANCE, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
--------------------------
15
19
16
[Continuation of signature pages to Construction Management Agreement (Phase III
- Improvements) dated to be effective June 16, 1999]
"BNPLC"
BNP LEASING CORPORATION
By:
----------------------------------
Xxxxx Xxxxxx, Vice President
16
20
1
Exhibit A
LEGAL DESCRIPTION
The real property located in the City of Sunnyvale, County of Santa Xxxxx, State
of California, described as follows:
PARCEL ONE:
All of Parcel A, as shown upon that certain Parcel Map filed for record in Book
292 at page 41, on November 10, 1971, in the Office of the Recorder of the
County of Santa Xxxxx.
Together with that portion of Parcel A, as shown upon that certain Parcel Map
filed for record in Book 216 at Page 2, on October 25, 1966, in the Office of
the Recorder of the County of Santa Xxxxx, described as follows:
Beginning at the Northwest corner of Parcel A as shown upon said Parcel Map
filed for record in Book 216 at Page 2; thence along the Westerly line of said
Parcel A, South 14(degrees) 51' 33" West 223.09 feet to a point hereinafter
referred to as Point "X"; thence leaving said Westerly line North 38(degrees)
52' 02" East 134.85 feet; thence North 51(degrees) 07' 58" West 49.68; thence
North 38(degrees) 52' 02" East 87.23 feet to the Northerly line of last said
Parcel A; thence along said Northerly line North 75(degrees) 07' 58" West 44.97
feet to the point of beginning.
Excepting therefrom that parcel of land described in the deed to Santa Xxxxx
Valley Transit District, recorded October 24, 1997 as Instrument No. 13912192,
Official Records in said Office of the Recorder of the County of Santa Xxxxx,
described as follows:
Also, excepting therefrom that portion of said Parcel A, as shown upon that
certain Parcel Map filed for record in Book 292 at page 41, on November 10,
1971, in the office of the Recorder of the County of Santa Xxxxx, described as
follows:
Beginning at above mentioned Point "X"; thence along the Easterly line of Parcel
A as shown upon said Parcel Map filed for record in Book 292 at page 41 South
14(degrees) 51' 33" West 186.10 feet to a point on the Northeasterly line of
that parcel of land described in the deed to Santa Xxxxx Valley Transit
District, recorded October 24, 1997 as Instrument No. 13912192, Official Records
in said Office of the Recorder of the County of Santa Xxxxx, said point being on
a non-tangent curve concave Southwesterly and having a radius of 1002.05 feet, a
radial line through said point bears North 45(degrees) 01' 56" East; thence
Northwesterly along said Northeasterly line and along said curve through a
central angle of 04(degrees) 20' 28" an arc length of 75.92 feet; thence leaving
said Northeasterly line non-tangent from last said curve North 38(degrees) 52'
02" East 164.71 feet to said Point of beginning. As created by that certain
Certificate of Compliance (Lot Line Adjustment) recorded September 16, 1998,
under Series No. 14395996.
PARCEL TWO:
Exhibit - Page 1
21
2
Storm drain(age) easements, so described in the deeds referred to hereafter, in
and as to certain portions of Parcel 'A', so designated on the Parcel Map
recorded August 28, 1974 in Book 345 of Maps, page 20, Santa Xxxxx County
Records.
Said easements are the same as are described in the deeds to Los Altos Venture,
a Joint Venture consisting of Mape Industries, Inc., a California corporation,
and REBMA California Six, Inc., a Missouri corporation, recorded December 29,
1971 in Book 9647, page 183, and April 17, 1972 in Book 9790, page 380, Official
Records; and to Xxxx Enterprises, a partnership, and Northwest Poultry and Dairy
Products Co., an Oregon corporation, recorded June 17, 1975 in Book B467, page
167, Official Records.
PARCEL THREE:
A non-exclusive easement for ingress and egress as shown in that certain
Reciprocal Easement Agreement recorded September 16, 1998 under Series No.
14396001, more particularly described as follows:
Being a portion of Parcel A, as shown upon that certain Parcel Map filed for
record in Book 292 at page 41, on November 10, 1971, in the Office of the
Recorder of the County of Santa Xxxxx, and a portion of Parcel A, as shown upon
that certain Parcel Map filed for record in Book 216 at Page 2, on October 25,
1966, in the Office of the Recorder of the County of Santa Xxxxx, described as
follows:
Commencing at the Northeasterly corner of that parcel of land described in the
deed to Santa Xxxxx Valley Transit District, recorded October 24, 1997 as
Instrument No. 13912192, Official Records in said Office of the Recorder of the
County of Santa Xxxxx, said point lying on the easterly line of said Parcel A,
as shown upon that certain Parcel Map filed for record in Book 292 at page 41.
Thence Northwesterly along the Northeasterly line of said parcel of land
described in the deed to Santa Xxxxx Valley Transit District along a curve to
the left with a radius of 1002.05 feet, from which a radial line bears North
45(degrees) 01' 56" East, through a central angle of 4(degrees) 20' 28" for an
arc length of 75.92 feet to the true point of beginning; thence North
38(degrees) 52' 02" East 82.92 feet; thence Southeasterly along a non-tangent
curve to the left with a radius of 78.00 feet, from which a radial line bears
South 38(degrees) 52' 02" West, through a central angle of 28(degrees) 09' 05"
for an arc length of 38.32 feet; thence North 38(degrees) 52' 02" East 177.73
feet; thence Northwesterly along a curve to the left with a radius of 17.00 feet
through a central angle of 90(degrees) 00' 00" for an arc length of 26.70 feet;
thence North 51(degrees) 07' 58" West 19.80 feet; thence the following three
courses: North 38(degrees) 52' 02" East 12.69 feet North 51(degrees) 07' 58"
West 49.68 feet; North 38(degrees) 52' 02" East 87.23 feet to the Northeasterly
line of said Parcel A, as shown upon that certain Parcel Map filed for record in
Book 216 at Page 2; thence South 75(degrees) 07' 58" East 13.45 feet along said
Northeasterly line; thence South 38(degrees) 52' 02" West 74.94 feet; thence
Southerly along a non-tangent curve to the left with a radius of 14.00 feet,
from which a radial line bears North 88(degrees) 46' 22" West, through a central
angle of 52(degrees) 21' 36" for an arc length of 12.79 feet; thence South
51(degrees) 07' 58" East 85.87 feet; thence South 38(degrees) 52' 02" West
252.96 feet; North 51(degrees) 07' 58" West 41.72 feet; thence Southwesterly
along a non-tangent curve to the left with a radius of 20.00 feet, from which a
radial line bears North 10(degrees) 35' 40" West, through a central angle of
40(degrees) 32' 18" for an arc length of 14.15 feet; thence South 38(degrees)
52' 02" West 29.48 feet; thence Southerly along a tangent curve to the left with
a radius of 20.00 feet, through a central angle of 60(degrees) 45' 15" for an
arc length 21.21 feet to a point on said Northeasterly line of said parcel of
land described in the deed to Santa Xxxxx Valley Transit District;
Exhibit - Page 2
22
3
thence Northwesterly along said Northeasterly line along a non-tangent curve to
the left with a radius of 1002.05 feet, from which a radial line bears North
42(degrees) 01' 23" East, through a central angle of 1(degree) 19' 55" for an
arc length of 23.29 feet to the True Point of Beginning.
APN: 000-00-000
ARB: 110-03-x066
Exhibit - Page 3
23
1
Exhibit B
DESCRIPTION OF THE CONSTRUCTION PROJECT
Subject to future Scope Changes, the Construction Project will be
substantially consistent with the following general description and with the
Site Plan attached to this Exhibit.
In addition to the site plan, attached to and made a part of this Exhibit
are excerpts from an appraisal prepared for BNPLC, which describe the
Construction Project.
Exhibit - Page 1
24
1
Exhibit C
ESTOPPEL FROM CONTRACTOR
_________, 199__
BNP Leasing Corporation
00000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Re: Assignment of Construction Contract
Ladies and Gentlemen:
The undersigned hereby represents to BNP LEASING CORPORATION, a Delaware
corporation ("BNPLC"), and covenants with BNPLC as follows:
1 The undersigned has entered into that certain [Construction Contract] (the
"CONSTRUCTION CONTRACT") by and between the undersigned and Network Appliance,
Inc. ("NAI") dated , ____ for the construction of the improvements to be
constructed as part of NAI's Sunnyvale campus leased by NAI (the "IMPROVEMENTS")
on the land described in the Improvements Lease Documents described below (the
"LAND" and, together with the Improvements and any other improvements now on or
constructed in the future on the Land, the "PROJECT").
2 The undersigned has been advised that, by a Lease Agreement (Phase II -
Improvements) and a Construction Management Agreement (Phase II - Improvements),
both dated as of June 16, 1999 (collectively, the "IMPROVEMENTS LEASE
DOCUMENTS"), BNPLC is leasing the Project to NAI and has agreed, subject to the
terms and conditions of the Improvements Lease Documents, to provide a
construction allowance for the design and construction of the Improvements. The
undersigned has also been advised that the Improvements Lease Documents
expressly provide that third parties (including the undersigned) are not
intended as beneficiaries of the Improvements Lease Documents and, thus, will
have no standing to enforce any obligations of NAI or BNPLC under the
Improvements Lease Documents, including any such obligation that BNPLC may have
to provide the construction allowance. The undersigned understands that the
Improvements Lease Documents expressly provide that NAI is not authorized to
enter into any construction contract or other agreement with any third party in
the name of BNPLC or to otherwise bind BNPLC to any contract with a third party.
3 A complete and correct copy of the Construction Contract is attached to this
letter. The Construction Contract is in full force and effect and has not been
modified or amended, except as provided in any written modifications or
amendments which are also attached to this letter.
4 The undersigned has not sent or received any notice of default or any other
notice for the purpose of terminating the Construction Contract, nor does the
undesigned have knowledge of any existing circumstance or event which, but for
the elapse of time or otherwise, would constitute a default by the undersigned
or by NAI under the Construction Contract.
Exhibit - Page 1
25
BNP Leasing Corporation
______________, 199__
Page 2
The undersigned acknowledges and agrees that:
a) Title to all Improvements shall, when constructed on the Land, pass
directly to BNPLC, not to NAI. BNPLC shall not, however, be held liable for, and
the undersigned shall not assert, any claims, demands or liabilities against
BNPLC arising under or in any way relating to the Construction Contract;
provided, this paragraph will not (1) be construed as a waiver of any statutory
mechanic's or materialmen's liens against the interests of NAI in and to the
Land or the improvements thereon that may otherwise exist or arise in favor of
the undersigned, or (2) prohibit the undersigned from asserting any claims or
making demands against BNPLC under the Construction Contract if BNPLC elects in
writing, pursuant to paragraph b) below, to assume the Construction Contract in
the event NAI's right to possession of the Land is terminated, it being
understood that in the event of such an assumption BNPLC shall be liable for the
unpaid balance of the contract sum due for the work of the undersigned, payable
pursuant to (and subject to the terms and conditions set forth for the benefit
of the owner in) the Construction Contract, but in no event shall BNPLC
otherwise be personally liable for any acts or omissions on the part of NAI.
b) Upon any termination of NAI's right to possession of the Project under
the Improvements Lease Documents, including any eviction of NAI resulting from
an Event of Default (as defined in the Improvements Lease Documents), BNPLC
shall be entitled (but not obligated), by notice to the undersigned and without
the necessity of the execution of any other document, to assume NAI's rights and
obligations under the Construction Contract, cure any defaults by NAI thereunder
and enforce the Construction Contract and all rights of NAI thereunder. Within
ten days of receiving notice from BNPLC that NAI's right to possession has been
terminated, the undersigned shall send to BNPLC a written estoppel letter
stating: (i) that the undersigned has not performed any act or executed any
other instrument which invalidates or modifies the Construction Contract in
whole or in part (or, if so, the nature of such modification); (ii) that the
Construction Contract is valid and subsisting and in full force and effect;
(iii) that there are no defaults or events of default then existing under the
Construction Contract and no event has occurred which with the passage of time
or the giving of notice, or both, would constitute such a default or event of
default (or, if there is a default, the nature of such default in detail); (iv)
that the construction contemplated by the Construction Contract is proceeding in
a satisfactory manner in all material respects (or if not, a detailed
description of all significant problems with the progress of construction); (v)
a reasonably detailed report of the then critical dates projected by the
undersigned for work and deliveries required to complete the Project; (vi) the
total amount received by the undersigned for construction through the date of
the letter; (vii) the estimated total cost of completing the undersigned's work
as of the date of the letter, together with a current draw schedule; and (viii)
any other information BNPLC may request to allow it to decide whether to assume
the Construction Contract. BNPLC shall have seven days from receipt of such
written certificate containing all such requested information to decide whether
to assume the Construction Contract. If BNPLC fails to assume the Construction
Contract within such time, the undersigned agrees that BNPLC shall not be liable
(and the undersigned shall not assert or bring any action against BNPLC, except
to enforce statutory lien rights, if any, of the undersigned against the Land or
improvements on the Land) for any damages or other amounts resulting from the
breach or termination of the Construction Contract or under any other theory of
liability of any kind or nature, but rather the undersigned shall look solely to
NAI (and statutory lien rights, if any, of the undersigned against the Land and
any improvements thereon) for the recovery of any such damages or other amounts.
c) If BNPLC notifies the undersigned that BNPLC shall not assume the
Construction Contract pursuant to the preceding paragraph following the
termination of NAI's right to possession of the Project under the Improvements
Lease Documents, the undersigned shall immediately discontinue the work under
the Construction Contract and remove its personnel from the Project, and BNPLC
shall be entitled to take exclusive possession of the Project. The undersigned
shall also, upon request by BNPLC, deliver and assign to BNPLC all plans and
specifications and other contract documents previously delivered to the
undersigned (except that the undersigned may keep an original set of the
Construction Contract and other contract documents executed by NAI), all other
material relating to the work which belongs to BNPLC or NAI, and all
Exhibit - Page 2
26
BNP Leasing Corporation
______________, 199__
Page 3
papers and documents relating to governmental permits, orders placed, bills and
invoices, lien releases and financial management under the Construction
Contract. Notwithstanding the undersigned's receipt of any notice from BNPLC
that BNPLC declines to assume the Construction Contract, the undersigned shall
for a period not to exceed fifteen days after receipt of such notice take such
steps, at BNPLC's expense, as are reasonably necessary to preserve and protect
work completed and in progress and to protect materials, equipment and supplies
at the site or in transit.
d) If the Construction Contract is terminated by NAI before BNPLC is given
the opportunity to elect whether or not to assume the Construction Contract as
provided herein, BNPLC shall nonetheless have the right hereunder to assume the
Construction Contract, as if it had not been terminated, upon any termination of
NAI's right to possession of the Project under the Improvements Lease Documents;
provided, however, that if the work of the undersigned under the Construction
Contract has been disrupted because of NAI's termination of the Construction
Contract, the undersigned shall be entitled to an equitable adjustment to the
price of the Construction Contract, following any assumption thereof by BNPLC,
for the additional costs incurred by the undersigned attributable to the
disruption; and, provided further, that if BNPLC does assume the Construction
Contract, BNPLC shall receive a credit against the price of the Construction
Contract for any consideration paid to the undersigned by NAI because of NAI's
prior termination of the Construction Contract (whether such consideration is
designated a termination fee, settlement payment or otherwise).
e) No action taken by BNPLC or the undersigned with respect to the
Construction Contract shall prejudice any other rights or remedies of BNPLC or
the undersigned provided by law, by the Improvements Lease Documents, by the
Construction Contract or otherwise against NAI.
f) The undersigned agrees promptly to notify BNPLC of any material default
or claimed material default by NAI under the Construction Contract of which the
undersigned is aware, describing with particularity the default and the action
the undersigned believes is necessary to cure the same. The undersigned will
send any such notice to BNPLC prominently marked "URGENT - NOTICE OF NAI'S
DEFAULT UNDER CONSTRUCTION AGREEMENT WITH NETWORK APPLIANCE, INC. - SUNNYVALE,
CALIFORNIA" at the address specified for notice below (or at such other
addresses as BNPLC shall designate in notice sent to the undersigned), by
certified or registered mail, return receipt requested. Following receipt of
such notice, the undersigned will permit BNPLC or its designee to cure any such
default within the time period reasonably required for such cure, but in no
event less than thirty days. If it is necessary or helpful to take possession of
all or any portion of the Project to cure a default by NAI under the
Construction Contract, the time permitted by the undersigned for cure by BNPLC
will include the time necessary to terminate NAI's right to possession of the
Project and evict NAI, provided that BNPLC commences the steps required to
exercise such right within sixty days after it is entitled to do so under the
terms of the Improvements Lease Documents and applicable law. If the undersigned
incurs additional costs due to the extension of the aforementioned cure period,
the undersigned shall be entitled to an equitable adjustment to the price of the
Construction Contract for such additional costs.
g) Any notice or communication required or permitted hereunder shall be
given in writing, sent by (a) personal delivery or (b) expedited delivery
service with proof of delivery or (c) United States mail, postage prepaid,
registered or certified mail or (d) telegram, telex or telecopy, addressed as
follows:
To the undersigned:
----------------------------
-----------------------------
-----------------------------
Telecopy: (___) ___-_____
Exhibit - Page 3
27
BNP Leasing Corporation
______________, 199__
Page 4
To BNPLC: BNP Leasing Corporation
--------
00000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Telecopy: (000) 000-0000
A copy of any such notice or communication will also be sent to NAI by (a)
personal delivery or (b) expedited delivery service with proof of delivery or
(c) United States mail, postage prepaid, registered or certified mail or (d)
telegram, telex or telecopy, addressed as follows:
Network Appliance, Inc.
Attn: Corporate Secretary
0000 Xxx Xxxxxx Xxxxxxxxxx
Xxxxx Xxxxx, XX 00000
Telecopy: (___) ___-____
h) The undersigned acknowledges that it has all requisite authority to
execute this letter. The undersigned further acknowledges that BNPLC has
requested this letter, and is relying on the truth and accuracy of the
representations made herein, in connection with BNPLC's decision to advance
funds for construction under the Improvements Lease Documents with NAI.
Very truly yours,
-------------------------------------
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
NAI joins in the execution of this letter solely for the purpose of
evidencing its consent hereto, including its consent to the provisions that
would allow, but not require, BNPLC to assume the Construction Contract in the
event NAI is evicted from the Project.
Network Appliance, Inc.
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
Exhibit - Page 4
28
1
BNP Leasing Corporation
_______________, 199___
Page 1
Exhibit D
ESTOPPEL FROM DESIGN PROFESSIONALS
_________, 199__
BNP Leasing Corporation
00000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Re: Assignment of [Architect's Agreement/Engineering Contract]
Ladies and Gentlemen:
The undersigned hereby represents to BNP LEASING CORPORATION, a Delaware
corporation ("BNPLC"), and covenants with BNPLC as follows:
1 The undersigned has entered into that certain [Architect's
Agreement/Engineering Contract] (the "AGREEMENT") by and between the undersigned
and Network Appliance, Inc. ("NAI") dated , ____ for the [design/engineering] of
the improvements to be constructed as part of NAI's Sunnyvale campus leased by
NAI (the "IMPROVEMENTS") on the land described in the Improvements Lease
Documents described below (the "LAND" and, together with the Improvements and
any other improvements now on or constructed in the future on the Land, the
"PROJECT").
2 The undersigned has been advised that, by a Lease Agreement (Phase III -
Improvements) and a Construction Management Agreement (Phase III -
Improvements), both dated as of June 16, 1999 (collectively, the "IMPROVEMENTS
LEASE DOCUMENTS"), BNPLC is leasing the Project to NAI and has agreed, subject
to the terms and conditions of the Improvements Lease Documents, to provide a
construction allowance for the design and construction of the Improvements. The
undersigned has also been advised that the Improvements Lease Documents
expressly provide that third parties (including the undersigned) are not
intended as beneficiaries of the Improvements Lease Documents and, thus, will
have no standing to enforce any obligations of NAI or BNPLC under the
Improvements Lease Documents, including any such obligation that BNPLC may have
to provide the construction allowance. The undersigned understands that the
Improvements Lease Documents expressly provide that NAI is not authorized to
enter into any Agreement or other agreement with any third party in the name of
BNPLC or to otherwise bind BNPLC to any contract with a third party.
3 A complete and correct copy of the Agreement is attached to this letter. The
Agreement is in full force and effect and has not been modified or amended,
except as provided in any written modifications or amendments which are also
attached to this letter.
4 The undersigned has not sent or received any notice of default or any other
notice for the purpose of terminating the Agreement, nor does the undesigned
have knowledge of any existing circumstance or event which, but for the elapse
of time or otherwise, would constitute a default by the undersigned or by NAI
under the Agreement.
Exhibit - Page 2
29
BNP Leasing Corporation
_______________, 199___
Page 2
The undersigned acknowledges and agrees that:
a) BNPLC shall not be liable for, and the undersigned shall not assert, any
claims, demands or liabilities against BNPLC arising under or in any way
relating to the Agreement; provided, this paragraph will not (1) be construed as
a waiver of any statutory mechanic's or materialmen's liens against the
interests of NAI in and to the Land or the improvements thereon that may
otherwise exist or arise in favor of the undersigned, or (2) prohibit the
undersigned from asserting any claims or making demands against BNPLC under the
Agreement if BNPLC elects in writing, pursuant to paragraph b) below, to assume
the Agreement in the event NAI's right to possession of the Land is terminated,
it being understood that in the event of such an assumption BNPLC shall be
liable for the unpaid balance of the fees for services of the undersigned,
payable pursuant to (and subject to the terms and conditions set forth for the
benefit of the owner in) the Agreement, but in no event shall BNPLC otherwise be
personally liable for any acts or omissions on the part of NAI.
b) Upon any termination of NAI's right to possession of the Project under
the Improvements Lease Documents, including any eviction of NAI resulting from
an Event of Default (as defined in the Improvements Lease Documents), BNPLC
shall be entitled (but not obligated), by notice to the undersigned and without
the necessity of the execution of any other document, to assume NAI's rights and
obligations under the Agreement, cure any defaults by NAI thereunder and enforce
the Agreement and all rights of NAI thereunder. Within ten days of receiving
notice from BNPLC that NAI's right to possession has been terminated, the
undersigned shall send to BNPLC a written estoppel letter stating: (i) that the
undersigned has not performed any act or executed any other instrument which
invalidates or modifies the Agreement in whole or in part (or, if so, the nature
of such modification); (ii) that the Agreement is valid and subsisting and in
full force and effect; (iii) that there are no defaults or events of default
then existing under the Agreement and no event has occurred which with the
passage of time or the giving of notice, or both, would constitute such a
default or event of default (or, if there is a default, the nature of such
default in detail); (iv) that the services contemplated by the Agreement are
proceeding in a satisfactory manner in all material respects (or if not, a
detailed description of all significant problems with the progress of services);
(v) a reasonably detailed report of the then critical dates projected by the
undersigned for services required to complete the Project; (vi) the total amount
received by the undersigned for services through the date of the letter; (vii)
the estimated total cost of completing such services as of the date of the
letter, together with a current payment schedule; and (viii) any other
information BNPLC may request to allow it to decide whether to assume the
Agreement. BNPLC shall have seven days from receipt of such written certificate
containing all such requested information to decide whether to assume the
Agreement. If BNPLC fails to assume the Agreement within such time, the
undersigned agrees that BNPLC shall not be liable (and the undersigned shall not
assert or bring any action against BNPLC or, except to enforce statutory lien
rights, if any, of the undersigned against the Land or improvements on the Land)
for any damages or other amounts resulting from the breach or termination of the
Agreement or under any other theory of liability of any kind or nature, but
rather the undersigned shall look solely to NAI (and statutory lien rights, if
any, of the undersigned against the Land and any improvements thereon) for the
recovery of any such damages or other amounts.
c) If BNPLC notifies the undersigned that BNPLC shall not assume the
Agreement pursuant to the preceding paragraph following the termination of NAI's
right to possession of the Project under the Improvements Lease Documents, the
undersigned shall immediately deliver and assign to BNPLC the following: (1)
copies of all plans and specifications for the Project or any component thereof
previously generated by or delivered to the undersigned, (2) any other contract
documents previously delivered to the undersigned (except that the undersigned
may keep an original set of the Agreement and other contract documents executed
by NAI), (3) any other material relating to the services provided under the
Agreement, and (4) to the extent available to the undersigned all papers and
documents relating to governmental permits, orders placed, bills and invoices,
lien releases and financial management under the Agreement. Notwithstanding the
undersigned's receipt of any notice from BNPLC that BNPLC declines to assume the
Agreement, the undersigned shall for a period not to exceed thirty
Exhibit - Page 2
30
BNP Leasing Corporation
_______________, 199___
Page 3
days after receipt of such notice take such steps, at BNPLC's expense, as are
reasonably necessary to preserve the utility and value of services completed and
in progress and to protect plans and specifications and other materials
described in the preceding sentence.
d) If the Agreement is terminated by NAI before BNPLC is given the
opportunity to elect whether or not to assume the Agreement as provided herein,
BNPLC shall nonetheless have the right hereunder to assume the Agreement, as if
it had not been terminated, upon any termination of NAI's right to possession of
the Project under the Improvements Lease Documents; provided, however, that if
the services of the undersigned under the Agreement has been disrupted because
of NAI's termination of the Agreement, the undersigned shall be entitled to an
equitable adjustment to the price of the Agreement, following any assumption
thereof by BNPLC, for the additional costs incurred by the undersigned
attributable to the disruption; and, provided further, that if BNPLC does assume
the Agreement, BNPLC shall receive a credit against the price of the Agreement
for any consideration paid to the undersigned by NAI because of NAI's prior
termination of the Agreement (whether such consideration is designated a
termination fee, settlement payment or otherwise).
e) No action taken by BNPLC or the undersigned with respect to the
Agreement shall prejudice any other rights or remedies of BNPLC or the
undersigned provided by law, by the Improvements Lease Documents, by the
Agreement or otherwise against NAI.
f) The undersigned agrees promptly to notify BNPLC of any material default
or claimed material default by NAI under the Agreement of which the undersigned
is aware, describing with particularity the default and the action the
undersigned believes is necessary to cure the same. The undersigned will send
any such notice to BNPLC prominently marked "URGENT - NOTICE OF NAI'S DEFAULT
UNDER DESIGN AGREEMENT WITH NETWORK APPLIANCE, INC. - SUNNYVALE, CALIFORNIA" at
the address specified for notice below (or at such other addresses as BNPLC
shall designate in notice sent to the undersigned), by certified or registered
mail, return receipt requested. Following receipt of such notice, the
undersigned will permit BNPLC or its designee to cure any such default within
the time period reasonably required for such cure, but in no event less than
thirty days.
g) Any notice or communication required or permitted hereunder shall be
given in writing, sent by (a) personal delivery or (b) expedited delivery
service with proof of delivery or (c) United States mail, postage prepaid,
registered or certified mail or (d) telegram, telex or telecopy, addressed as
follows:
To the undersigned:
By:
----------------------------------
-----------------------------
----------------------------
Telecopy: (___) ___-_____
Exhibit - Page 3
31
BNP Leasing Corporation
_______________, 199___
Page 4
To BNPLC: BNP Leasing Corporation
--------
00000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Telecopy: (000) 000-0000
A copy of any such notice or communication will also be sent to NAI by (a)
personal delivery or (b) expedited delivery service with proof of delivery or
(c) United States mail, postage prepaid, registered or certified mail or (d)
telegram, telex or telecopy, addressed as follows:
Network Appliance, Inc.
Attn: Corporate Secretary
0000 Xxx Xxxxxx Xxxxxxxxxx
Xxxxx Xxxxx, XX 00000
Telecopy: (___) ___-____
h) The undersigned acknowledges that it has all requisite authority to
execute this letter. The undersigned further acknowledges that BNPLC has
requested this letter, and is relying on the truth and accuracy of the
representations made herein, in connection with BNPLC's decision to advance
funds for design services under the Improvements Lease Documents with NAI.
Very truly yours,
-------------------------------------
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
NAI joins in the execution of this letter solely for the purpose of
evidencing its consent hereto, including its consent to the provisions that
would allow, but not require, BNPLC to assume the Agreement in the event NAI is
evicted from the Project.
Network Appliance, Inc.
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
Exhibit - Page 4
32
1
Exhibit E
NOTICE REQUESTING ADVANCE TO COVER PROPERTY INSURANCE DEDUCTIBLE
BNP Leasing Corporation
00000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Re: Construction Management Agreement (Phase III - Improvements) dated as
of June 16, 1999 (the "CONSTRUCTION MANAGEMENT Agreement"), between Network
Appliance, Inc. ("NAI") and BNP Leasing Corporation ("BNPLC")
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Construction Management Agreement or in the Common
Definitions and Provisions Agreement (Phase III - Improvements) referenced in
the Construction Management Agreement. This letter shall constitute a request
made pursuant to subparagraph 2(A) of the Construction Management Agreement for
a final additional Construction Advance in the form of an addition to Escrowed
Proceeds equal to:
$____________________,
on the Base Rent Commencement Date, which will occur on:
_____________, 199 .
To induce BNPLC to make such Construction Advance, NAI represents and
warrants as follows: (x) the dollar amount specified above equals the property
insurance deductible permitted under the insurance requirements set forth in the
Lease, (y) a Pre-commencement Casualty has resulted in damage to the
Improvements, for which the cost of repairs will - because of such deductible -
exceed the Escrowed Proceeds paid or payable in connection with such damage
under the property insurance maintained by NAI in accordance with the insurance
requirements in the Improvements Lease, and (z) NAI has not and will not
otherwise receive a Construction Advance to reimburse such excess costs prior to
the expiration of BNPLC's obligation to make further Construction Advances as
provided in subparagraph 2(C)(3) of the Construction Management Agreement.
NAI ACKNOWLEDGES THAT IF ANY REPRESENTATION ABOVE IS NOT TRUE, THEN NAI'S
OBLIGATION TO INDEMNIFY AGAINST LOSSES SUSTAINED BY BNPLC OR ANY OTHER
INTERESTED PARTY BECAUSE OF ITS RELIANCE ON THIS LETTER SHALL CONSTITUTE
ABSOLUTE NAI CONSTRUCTION OBLIGATIONS UNDER THE CONSTRUCTION MANAGEMENT
AGREEMENT AND THE IMPROVEMENTS LEASE.
Executed this _____ day of ______________, 19___.
NETWORK APPLIANCE, INC.
Name:
-----------------------------
Title:
----------------------------
[cc all Participants]
Exhibit - Page 1
33
2
Exhibit F
CONSTRUCTION ADVANCE REQUEST FORM
BNP Leasing Corporation
00000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Re: Construction Management Agreement (Phase III - Improvements) dated as
of June 16, 1999 (the "CONSTRUCTION MANAGEMENT Agreement"), between Network
Appliance, Inc. ("NAI") and BNP Leasing Corporation ("BNPLC")
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Construction Management Agreement or in the Common
Definitions and Provisions Agreement (Phase III - Improvements) referenced in
the Construction Management Agreement. This letter shall constitute a
Construction Advance Request, requesting a Construction Advance of:
$____________________,
on the Advance Date that will occur on:
________________, 199_.
To induce BNPLC to make such Construction Advance, NAI represents and
warrants as follows:
I. CALCULATION OF LIMIT IMPOSED BY SUBPARAGRAPH 2(C)(2)(b)OF THE CONSTRUCTION
MANAGEMENT AGREEMENT:
(1) NAI has paid or incurred bona fide Reimbursable Construction-Period Costs
other than for Work (e.g., property taxes) of no less than $________________
(2) NAI has paid or incurred bona fide Reimbursable Construction-Period Costs
for Prior Work of no less than $________________
(3) NAI has received prior Construction Advances of no more than
$________________
LIMIT (1 + 2 - 3) $________________
Exhibit - Page 1
34
2
II. PROJECTED COST OVERRUNS:
NAI [CHECK ONE: _ DOES / _ DOES NOT] believe that Projected Construction
Overruns are more likely than not. [If NAI does believe that Projected Cost
Overruns are more likely than not, and if NAI believes that the amount of such
Projected Construction Overruns can be reasonably estimated, NAI estimates the
same at $___________.]
NOTE: The Construction Management Agreement defines Projected Construction
Overruns as the excess, if any, of (1) the total of projected Reimbursable
Construction-Period Costs yet to be incurred or for which NAI has yet to be
reimbursed hereunder (including projected Reimbursable Construction-Period Costs
for Future Work), over (2) the balance of the remaining Construction Allowance
projected to be available to cover such costs.
III. ABSENCE OF CERTAIN CMA SUSPENSION EVENTS:
A. The Construction Project is progressing without significant interruption
in a good and workmanlike manner and substantially in accordance with Applicable
Laws, with Permitted Encumbrances, with Development Documents and with the
requirements of the Construction Management Agreement, except as follows: (IF
THERE ARE NO EXCEPTIONS, INSERT "NO EXCEPTIONS")
-----------
-----------
-----------
-----------
B. If NAI has received notice of any Defective Work, NAI has promptly
corrected or is diligently pursuing the correction of such Defective Work,
except as follows: (IF THERE ARE NO EXCEPTIONS, INSERT "NO EXCEPTIONS")
-----------
-----------
-----------
-----------
NAI ACKNOWLEDGES THAT IF ANY REPRESENTATION ABOVE IS NOT TRUE, THEN NAI'S
OBLIGATION TO INDEMNIFY AGAINST LOSSES SUSTAINED BY BNPLC OR ANY OTHER
INTERESTED PARTY BECAUSE OF ITS RELIANCE ON THIS LETTER SHALL CONSTITUTE
ABSOLUTE NAI CONSTRUCTION OBLIGATIONS UNDER THE CONSTRUCTION MANAGEMENT
AGREEMENT AND THE IMPROVEMENTS LEASE.
Executed this _____ day of ______________, 19___.
NETWORK APPLIANCE, INC.
Name:
----------------------------
Title:
---------------------------
[cc all Participants]
Exhibit - Page 2
35
1
Exhibit G
NOTICE OF VOLUNTARY NAI CONSTRUCTION CONTRIBUTION
BNP Leasing Corporation
00000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Re: Construction Management Agreement (Phase III - Improvements) dated as
of June 16, 1999 (the "CONSTRUCTION MANAGEMENT Agreement"), between Network
Appliance, Inc. ("NAI") and BNP Leasing Corporation ("BNPLC")
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Construction Management Agreement or in the Common
Definitions and Provisions Agreement (Phase III - Improvements) referenced in
the Construction Management Agreement. This letter shall constitute notice,
given as described in subparagraph 4(c) of the Construction Management
Agreement, that NAI is paying with this letter, or unconditionally and
irrevocably committing to pay as described below, a Voluntary NAI Construction
Contribution in the amount of $_____________________.
Such payment by NAI will be in addition to any Voluntary NAI Construction
Contributions required by other notices given by NAI as described in
subparagraph 4(c) of the Construction Management Agreement.
Further, if the Voluntary NAI Construction Contribution required by this
letter is not being delivered to BNPLC by NAI contemporaneously with this
letter, then at such time as BNPLC's obligation to fund additional Construction
Advances is excused by any of the terms and conditions set forth in the
Construction Management Agreement, NAI shall be obligated to deliver such
Voluntary NAI Construction Contribution as required to eliminate (or reduce to
the maximum extent possible) Projected Cost Overruns, including any Projected
Cost Overruns caused by the accrual of Carrying Costs under and as described in
the Improvements Lease referenced in the Construction Management Agreement.
Executed this _____ day of ______________, 19___.
NETWORK APPLIANCE, INC.
Name:
----------------------------
Title:
---------------------------
[cc all Participants]
Exhibit - Page 1
36
1
Exhibit H
PREEMPTIVE NOTICE BY NAI
BNP Leasing Corporation
00000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Re: Construction Management Agreement (Phase III - Improvements) dated as
of June 16, 1999 (the "CONSTRUCTION MANAGEMENT Agreement"), between Network
Appliance, Inc. ("NAI") and BNP Leasing Corporation ("BNPLC")
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Construction Management Agreement or in the Common
Definitions and Provisions Agreement (Phase III - Improvements) referenced in
the Construction Management Agreement. This letter is intended to constitute a
Preemptive Notice, given as described in subparagraph 5(B) of the Construction
Management Agreement. As provided in clause (2) of the definition of Designated
Sale Date in the Common Definitions and Provisions Agreement (Phase III -
Improvements), this letter shall constitute notice, given in accordance with
clause (2) of the definition of Common Definitions and Provisions Agreement
(Phase III - Improvements), that NAI designates the following date as the
Designated Sale Date:
----------------, ----.
NAI acknowledges, however, that this notice will not be effective as a
Preemptive Notice if (1) such date is sooner than thirty days after the date of
this notice or later than ninety days after the date of any FOCB Notice
previously given by BNPLC under the Construction Management Agreement, or (2)
NAI has previously made any Issue 97-10 Election.
NAI hereby unconditionally, unequivocally and irrevocably: (1) waives any
right to make any Issue 97-10 Election under any of the Operative Documents, and
(2) acknowledges and agrees that for purposes of calculating the Supplemental
Payment required by the Purchase Agreement, the Maximum Remarketing Obligation
will equal the Break Even Price under the Purchase Agreement.
Executed this _____ day of ______________, 19___.
Network Appliance, Inc.
Name:
-----------------------
Title:
----------------------
[cc all Participants]
Exhibit - Page 1
37
1
Exhibit I
NOTICE OF TERMINATION BY NAI
BNP Leasing Corporation
00000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Re: Construction Management Agreement (Phase III - Improvements) dated as
of June 16, 1999 (the "CONSTRUCTION MANAGEMENT Agreement"), between Network
Appliance, Inc. ("NAI") and BNP Leasing Corporation ("BNPLC")
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Construction Management Agreement referenced above or in
the Common Definitions and Provisions Agreement (Phase III - Improvements)
referenced in the Construction Management Agreement.
NAI has determined that (1) the Construction Advances to be provided to it
under the Construction Management Agreement will not be sufficient to cover all
Construction-Period Reimbursable Costs, whether because the cost of the Work
exceeds budgeted expectations (resulting in Projected Cost Overruns) or because
NAI can no longer satisfy conditions to BNPLC's obligation to provide
Construction Advances in the Construction Management Agreement, or (2) the
Construction Project cannot be substantially completed before the Base Rent
Commencement Date for reasons other than a breach by NAI of the Construction
Management Agreement. Accordingly, this letter shall constitute a Notice of
NAI's Election to Terminate the Construction Management Agreement, given as
provided in subparagraph 5(D) of the Construction Management Agreement.
NAI irrevocably and unconditionally elects to terminate the Construction
Management Agreement effective as of the following date (which, as required by
subparagraph 5(D) thereof is a date not less than thirty days after the date
this notice is given):
_________, 199__
NAI ACKNOWLEDGES THAT THE ELECTION MADE BY NAI DESCRIBED ABOVE CONSTITUTES
AN ISSUE 97-10 ELECTION UNDER AND AS DEFINED IN THE OPERATIVE DOCUMENTS.
Executed this _____ day of ______________, 19___.
NETWORK APPLIANCE, INC.
Name:
--------------------------------
Title:
-------------------------------
[cc all Participants]
Exhibit - Page 1
